Watergate sparked statutes, suits here

06.19.17

“To create a public scandal is what’s wicked”

French Author Moliere, Tartuffe (1664)

Forty-five years ago this week, Saturday, June 17, 1972, to be exact, was the beginning of one of the greatest American political scandals until now: the bungled burglary at the Watergate complex in Washington, D.C. It was in the wee hours of that day, that five burglars associated with the Committee to Re-Elect the President (CREEP), Richard Nixon, aided by two lookout men across the street, crept into the Democratic National Headquarters at the Watergate.

Initially termed a “third-rate burglary” by White House spokesman, Ronald Ziegler, the botched break-in evolved into the downfall and resignation of President Nixon 26 months later. In the meantime, the nation went through an agonizing and fitful period of time that sparked changes in politics, policies and legal procedures, referred to by Nixon’s successor, Gerald Ford, upon his assuming office, as a “long national nightmare.”

The scandal precipitated all sorts of fallout from the highest to lowest levels of political circles, many given the “blank-gate” appellation. The current investigations of President Donald Trump and his administration has evoked Watergate-related terms such as “obstruction of justice,” “high crimes and misdemeanors,” special prosecutor, and the “I” word, impeachment, all ingredients of the Watergate affair.

It remains to be seen how the current controversy will play out, its effect on institutions and individuals, and the way it will be viewed years from now. But looking back 45 years, Watergate had numerous connections with Minnesota and many intersections with the law in Minnesota. Its effects are still reverberating as the latest White House imbroglio unfolds.

Minnesota men

Minnesotans played a prominent role in Watergate. Former Minnesota member of Congress, Clark McGregor, who had represented the Twin Cities suburbs for five terms, was the top official and spokesman for CREEP, although he was not deemed to have any criminal culpability before he was replaced a few months after the break-in.

Secretary of Commerce Maurice Stans, a native of Shakopee, was one of the president’s chief fund raisers, often referred to as a “bagman” for CREEP, which underlay many of the Watergate abuses. Kenneth Dahlberg, a Twin Cities hearing aid magnate, was a CREEP contributor, and the revelation of his large cashier’s check contribution of $25,000 to CREEP, which ended up in the bank account in Florida of one of the bungling Watergate burglars, helped unravel some of the communications between the White House and Watergate. The episode is famously depicted in the award-winning movie, “All the President’s Men,” based upon the book of the same title by Washington Post Watergate busters Bob Woodward and Carl Bernstein.

Another Minnesota business mogul, Dwayne Andreas, also became caught up in the Watergate brouhaha, although for financially supporting a Nixon adversary, leading to criminal prosecution against him and his company, for which they both were acquitted.

Charles Colson, one of Nixon’s longtime hatchet men, and Watergate participant, after his conviction on Watergate related offenses, later started a rehabilitation program known as Prison Fellowship Organization, which had strong roots in Minnesota, prior to his death six years ago.

Scandal statutes

Watergate also generated a bevy of legal developments. Most were in the Capitol, but a number of them occurred here in Minnesota, including several statutes inspired by the scandal.

One feature of Watergate, transparency in governmental affairs, was addressed through a new “sunshine” law. Although the Open Meeting Law, now codified as Minn. Stat. § 513D.01 et seq., had been on the books since 1957, it was supplemented by another sunshine measure, the Minnesota Government Data Practices Act, now Minn. Stat. § 13.01, et seq. A modest effort enacted to establish boundaries for public and private data in the public sector, it has mushroomed over the years into a behemoth that regulates disclosure and privacy of most governmental records in this state.

Another frequently invoked Minnesota law attributable to Watergate is the whistleblower statute, Minn. Stat. § 181.932. Its establishment of protected conduct against reprisal in the workplace grew out of the Watergate scandal as many jurisdictions over the years banned retaliation against employers who raised legal concerns in the workplace.

But it was not until more than a decade later, first by a common law decision of the Minnesota Court of Appeals and affirmed by the state Supreme Court, that whistleblowing became a staple in Minnesota law. Phipps v. Clark Oil Refining Corp., 396 N.W.2d 588 (Minn. Ct. App. 1986), aff’d 408 N.W.2d 569 (Minn. App. 1987).

The legislation, enacted 30 years ago this spring, has been expanded from time-to-time, including a major legislative enlargement in 2013. The measure remains the subject of frequent, often contentious litigation. See, “Court asked ‘Who may blow the whistle,’” Minnesota Lawyer May 18, 2017.

Although not directly attributable to Watergate, another Minnesota statute of that period owes much of its vitality to it.

The Minnesota shield law, formally known as the Free Flow of Information Act, Minn. Stat. § 595.021, was enacted at the height of the scandal. It provides immunity to those gathering, reporting, and editing the news from compulsory disclosure of their confidential sources and unpublished data, except in limited circumstances. The measure was inspired by the investigative reporting that took place during the Watergate and the veneration of the media for helping to unravel the cover-up provided a boost for the law in ensuing years. It still remains a vital media tool in resisting efforts to force it to reveal its confidential sources. See Range Dev. Co. v. Star Tribune, 885 N.W.2d 500 (Minn. App. 2016).

Criminal and civil

A pair of Minnesota lawsuits also reflected another theme of Watergate, political contributions.

The scope of prosecutorial authority for Watergate was at issue in U.S. v. Andreas, 374 F.Supp. 402 (D. Minn. 1974), a criminal action, brought in 1974 by the special prosecutor against a Minnesota-based company, Archer Daniels Midland, and CEO Andreas alleging four counts of illegal corporate contributions to the unsuccessful presidential campaign of Minnesota’s Hubert Humphrey in 1968 against Nixon, four years before Watergate. Andreas and ADM asserted that the prosecution was barred because of the abolition late in 1973 of the special prosecutor’s office in the infamous “Saturday Night Massacre,” as well as the absence of special prosecutor jurisdiction to pursue matters not related to the Watergate break-in and ensuing events.

U.S. District Court Judge Earl R. Larson rejected a pretrial motion raising both of those claims, along with a request to dismiss on statute of limitations grounds. The sacking of the special prosecutor by President Nixon did not terminate actions commenced before the abolition of the office and its subsequent replacement by a successor. Dismissing such actions would create the “unseemly situation” in which proceedings brought before the special prosecutor’s office was abolished would continue, while those commenced afterward would be abrogated, an outcome that “finds support in neither law nor logic.” Furthermore, the “Saturday Night Massacre” attempt to abolish the office of special prosecutor was void.

The contention that the special prosecutor lacked jurisdiction to pursue matters not directly related to the burglary and 1972 presidential campaign failed because the congressional hearing to establish a special prosecutor intended to give the office wide latitude to determine which cases … to investigate and prosecute. Thus, the special prosecutor had authority to bring criminal charges relating to alleged illegal campaign contributions in the preceding presidential election four years before Watergate arose.

But the defendants were ultimately exonerated. A bench trial conducted before visiting Judge Edward McManus of the Northern District of Iowa resulted in exoneration of the company and its CEO on grounds that the contributions to the Humphrey campaign came from loans from the company to the CEO, which he later repaid.

Campaign contributions to the Watergate malefactors were an issue in U.S. v. 3M, 551F.2d 1106 (D. Minn. 1977) a criminal proceeding by the special prosecutors against 3M and two of its principal officers charging them with tax violations for political contributions over a span of 1963-1969. Judge Donald Alsop dismissed the indictment on grounds that it was barred by a guilty plea agreement by the company and its CEO to a misdemeanor charge of illegal campaign contributions to CREEP.

Applying a “clearly erroneous” standard, the 8th Circuit upheld that determination. The Watergate pleas were intended to “be fully dispositive of all criminal matters arising from the illegal corporate contributions.” Because the company and its officers “actively relied upon the agreement to their detriment in performing the conditions” required by the plea agreement and had been “fully cooperating” with the special prosecutor, any further prosecution for tax-related irregularities preceding Watergate is barred.

Watergate-related themes cropped up in a civil employment law dispute between a salesman and his former company for misrepresentations concerning the terms of the pension and profit sharing plan in Stanger v. Gordon, 309 Minn. 215, 244 N.W.2d 628 (Minn. 1976). Hennepin County District Court jury found that the salesman was defrauded regarding his retirement funds and awarded him $21,500 in compensatory damages and $12,900 in punitive damages.

The state Supreme Court upheld the fraud determination, but reduced the punitive damages to $7,500 because of inappropriate conduct of the employee’s attorney, consisting of repeated questions regarding attorney-client privilege, coupled with the closing argument in which he referred to the documents protected by attorney-client privilege as a potential “cover-up” akin to the then-current Watergate scandal. While the trial court did strongly disapprove of the conduct of the claimant’s attorney, he should not have been permitted to direct redundant questions about attorney-client materials that the trial court had ruled were off limits, as well as make adverse comment on the proper assertion of privilege in closing argument.

This behavior was improper and potentially prejudicial because it tended to undermine the public policy embodied in the statutory privilege. Although the Watergate-related reference in an “inflammatory manner … did not affect the jury’s determination of fraud,” it warranted slicing the punitive damages to reduce the impact of the Watergate remark.

As Minnesotans join the rest of the nation in remembering Watergate and the changes it wrought in Minnesota law, they also should recall the oft-cited observations of philosopher Georges Santayana: “Those who cannot remember the past are condemned to repeat it.”